GRAFTON narrowly escaped a major flood this week to the reported delight of the NSW Premier, Barry O'Farrell, and no doubt the town's 18,000 or so residents.
The northern New South Wales town averted disaster thanks to an 8.1 metre levee which held - just. The Clarence River, swollen by rain from the powerful remnants of ex-tropical cyclone Oswald, rose to 8.08 metres.
"It was very close," Scott Greensill, the general manager for the Clarence Valley shire, said. The river "was the highest on record".
After another major weather disaster, Grafton's network of levees, stretching 17 kilometres, might well become a touchstone in the debate over how much should be spent to protect vulnerable communities from extreme weather events, and who pays.
For the insurance industry, the need for mitigation just got that much clearer. Queensland, which has few towns shielded by levees and other works, has been hit by its third major flooding in four years.
Claims in the state for the latest event total 26,000 for about $300 million and rising.
While flooding was probably less severe south of the Tweed River, insurance claims have levelled out at about 2000 for about $10 million, and are "relatively stable", according to Campbell Fuller, the chief spokesman for the Insurance Council of Australia.
"These levees, if they're built properly and properly maintained, they work," Mr Fuller said. "Over the life of the levee, the return on the investment is 100-fold or more."
Floods in Wagga last year saw little damage to the levee-protected central business area while defenceless North Wagga had "widespread damage", he said.
The result translates into "substantially lower" insurance premiums between the two parts of Wagga with those living outside protected zones paying almost three times as much, Mr Fuller said: "A levee bank provides virtually an automatic discount."
People seeking flood insurance cover will be keen for any discount they can get as the affordability of insurance emerges as another issue for debate after the latest natural disasters.
Allianz has been offering the option of flood insurance for about a year but 98 per cent of customers in NSW living in areas with a flood risk of 1-in-50 years or less decline to take up the coverage, according to Richard Schofield, the general manager of corporate affairs for the insurer.
"We're very concerned about the affordability issues around flood cover, Mr Schofield said.
The cost of coverage amounts to an average of $4700 a year for home and contents valued at $389,000 in NSW, but about $8000 in Queensland for a similar value of assets.
For those living in areas deemed extreme risk, the coverage can rise to as high as $24,000 in NSW and $19,000 in Queensland, Mr Schofield said. Similar data is not yet available for Victoria where Allianz began offering such policies last September.
Allianz backs calls for a publicly funded re-insurance pool to help muster the funds necessary for mitigation works, such as levees, and to keep a lid on rising premiums - a view at odds with most of its competitors.
Wrangling between the governments over who pays for the levees - or subsidies to keep insurance affordable - has only just begun.
Ian Dinham, the chairman of the Floodplain Management Association, this week decried "the hypocrisy of our state and federal governments who show great concern for flood victims while the TV cameras are rolling during a flood, but ignore the issue during the rest of their elected term."
He said the NSW government set aside just $8.6 million a year for flood mitigation efforts, most of which was spent on research.
The Grafton levee, which helped save the town, was built in 1967 and owed little to recent government action. Mr Greensill said there were seven Grafton levees, work having begun in 1890.
The shire spends $800,000 a year to keep the mix of earth embankment and concrete blocks maintained.